Question: What is the expected return on a portfolio which is invested 20% in stock A, 50% in stock B, and 30% in stock C? STATE

What is the expected return on a portfolio which is invested 20% in stock A, 50% in stock B, and 30% in stock C?

STATE of ECON Prob of State of Econ Ret of State Occurs

Stock A B C

BOOM 20% 18% 9% 6%

NORMAL 70% 11% 7% 9%

RECESSION 10% -10% 4% 13%

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